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Soybeans, wheat end session in positive territory

Soybeans were higher on commercial and technical buying. Domestic crush margins are strong, soybean meal and crude oil were up during the session, and China bought 136,000 tons of 2022/23 U.S. soybeans ahead of the open. There are uncertainties about sustained demand from China, but there’s been no evident slowdown, yet. That was the second announced sale of U.S. soybeans this week for a running total of 246,000 tons. The USDA’s weekly export sales numbers are out Thursday morning. Soybean oil futures were down ahead of the USDA’s monthly crush numbers, which is scheduled for Thursday afternoon. Soybeans continue to keep an eye on planting and development conditions in Argentina.

Corn was modestly lower on fund and technical selling. Feed, food, and fuel demand is strong, cancelling out some of the bearish influence of slower than expected exports. The U.S. Energy Information Administration says ethanol production last week averaged 1.018 million barrels a day, down 23,000 on the week and 17,000 on the year, with stocks of 22.934 million barrels, a twelve week high, and up 105,000 from the previous week and 2.633 million from a year ago. That week-to-week decline in production was reflective to at least some degree of the uncertainty surrounding a U.S. rail strike, which has seemingly been averted, for now. Weather in South American continues to generally favor Brazil over Argentina. CONAB’s updated outlook for Brazil is scheduled for December 8th.

The wheat complex was higher on fund and technical buying. The USDA’s condition rating for winter wheat improved slightly but remains much lower than a year ago as the crop inches towards dormancy. Most forecasts have expanding drought conditions in much of the U.S. Plains into next spring. That will likely have at least some impact on yield and could lead to increased abandonment. The oversold conditions of the market allowed the complex to shrug off the slow demand for U.S. wheat and occasional gains in the dollar during the session. Globally, the trade is watching the tail end of winter wheat planting in Ukraine and Russia, along with yields in Argentina and crop quality in Australia. In addition to the planting in the Black Sea region, wheat continues to monitor the pace of export movement out of key regional ports. After a lack of significant adjustments in the previous month, the USDA could make changes to the supply and demand outlook for several nations in the next round of projections December 9th.

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